Sending Money Home in Times of Crime: The Case of Mexico

We explore at the municipality level how the climate of criminal violence has affected the flow of remittances to Mexico. Using a panel of municipalities in the years 2006 and 2010, we find that drug-related crimes and overall rates of homicides have reduced the percentage of families that receive remittances. This result is robust to controlling for net migration, political variables, and traditional socioeconomic explanations of remittance sending. It is also robust to potential threats to validity. We interpret this result as suggestive of self-interested concerns when sending money home amidst a climate of rampant violence. Nonetheless, mixed motivations to remit are evident in our analysis.